Section CX 55 — Income Tax Act 2007: Proceeds from disposal of investment shares

CX 55 Proceeds from disposal of investment shares What this section applies to (1) This section applies in an income year to the following entities unless the entity is assured, under an arrangement with another person, of having a gain on the disposal: (a) a portfolio investment entity other than a life fund PIE: (b) the New Zealand Superannuation Fund: (c) a life insurer. Excluded income (2) An amount that the entity derives from the disposal in the income year of a share issued by a company referred to in subsection (3) is— (a) excluded income of the entity for the income year, if the entity is described in subsection (1)(a) or (b); or (b) excluded income of the entity for the income year to the extent to which the amount is actuarially determined to be policyholder base income, if the entity is a life insurer. Particular company (3) The company referred to in subsection (2) is,— (a) at all times in the income year, a company resident in New Zealand and not treated under and for the purposes of a double tax agreement as not resident in New Zealand; or (b) a company that meets the following requirements: (i) a company that, at all times in the income year, is resident in Australia and not treated as resident in a country other than Australia under an agreement between Australia and the other country, that would be a double tax agreement if negotiated between New Zealand and the other country; and (ii) a company that, at the start of the income year or at the time the shares are first acquired in the income year, is included in an approved index under the ASX Market Rules made under Chapter 7 of the Corporations Act 2001 (Aust); and (iii) a company that, at all times in the income year, is required under the Income Tax Assessment Act 1997 (Aust) and the Income Tax Assessment Act 1936 (Aust) to maintain a franking account. Non-participating redeemable shares (4) This section does not apply to— (a) a fixed-rate share, within the meaning of paragraphs (a) to (d) of the definition of that term; or (b) a share for which the amount payable on cancellation is no more than the available subscribed capital per share calculated under the slice rule. Defined in this Act: actuarially determined , amount , arrangement , available subscribed capital , company , double tax agreement , excluded income , fixed-rate share , income , income year , life fund PIE , life insurer , pay , policyholder base income , , portfolio investment entity , resident in Australia , resident in New Zealand , share , slice rule Section CX 55: substituted, on 1 April 2010, by section 63(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section CX 55(4): replaced, on 2 November 2012, by section 17(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88). Section CX 55 list of defined terms available subscribed capital : inserted, on 2 November 2012, by section 17(2)(b) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88). Section CX 55 list of defined terms fixed-rate share : inserted, on 2 November 2012, by section 17(2)(b) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88). Section CX 55 list of defined terms non-participating redeemable share : repealed, on 2 November 2012, by section 17(2)(a) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88). Section CX 55 list of defined terms pay : inserted, on 2 November 2012, by section 17(2)(b) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88). Section CX 55 list of defined terms slice rule : inserted, on 2 November 2012, by section 17(2)(b) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).